Trade data to dominate
Holidays could see a cautious start to trading in the Asia Pacific region today. Early indications point to mild positive momentum, but a full diary of data could set the direction for investors. Trade data from China stands out as the most likely candidate.
European shares rallied despite weaker than expected German numbers, as investors recalled ECB Chair Draghi’s dovish comments last week. However, further signs of an unresponsive supply side in oil markets, this time from Russia, saw oil prices drop 4% and drag sentiment and industrial commodities lower. Commodity weakness could drive Australian share underperformance in the session.
Japanese national account data released this morning is still indicating economic contraction, albeit at lower rates than forecast. Australian consumer confidence slumped, but traders are awaiting the reads on business conditions and confidence due after market open. Last month, weakness in China trade data sparked growth concerns after exports and imports fell around 8%. Expectations that today’s release of August data will show similar declines are possibly setting up markets for a positive surprise.
Frequently Asked Questions about this Article…
China's trade data is crucial for investors as it can set the direction for markets. Weakness in this data, like last month's decline in exports and imports, can spark growth concerns, while positive surprises can boost market sentiment.
European shares have rallied despite weaker than expected German numbers, largely due to the dovish comments from ECB Chair Draghi, which have helped maintain investor confidence.
Oil prices dropped by 4% due to further signs of an unresponsive supply side in oil markets, particularly from Russia, which has negatively impacted sentiment and industrial commodities.
Commodity weakness, driven by factors like falling oil prices, could lead to underperformance in Australian shares as the country's economy is heavily reliant on commodity exports.
The Japanese national account data indicates that the economy is still contracting, although at lower rates than previously forecasted, suggesting a slow recovery.
Australian consumer confidence has slumped recently, but traders are looking forward to upcoming data on business conditions and confidence for further insights.
Expectations for China's August trade data release are low, with anticipated declines similar to last month's. However, this sets the stage for a potential positive surprise if the data exceeds expectations.
The Asia Pacific region is expected to have a cautious start to trading due to the holiday season and a full diary of data releases, with China's trade data being a key focus for investors.
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